Alternative Pension Capital: Opportunities Of The Russian Financial Market

Abstract

Due to the failure of the Russian pension reform, the population of the country faces the urgent need of finding other sources for the formation of individual pension capital. To do this, financial and nonfinancial instruments may be used that are not part of the state pension protection system. Thus, this concerns the formation of alternative pension capital. The paper describes the economic mechanism of the above capital, the principles of its formation. The key principle of allocating the financial capital of an individual as an alternative pension is targeting. It was this that formed the basis of further empirical research and made it possible to select the optimal financial instruments available to the population in the Russian financial market. The concentration of attention on individual investment accounts (IIA) and bank deposits showed the high prospects of the former. This is caused by an increase in the level of accessibility of this instrument (development of financial infrastructure), higher level of profitability, and the availability of tax incentives. Deposits in this case lose, since the level of real profitability is falling, and since 2021, income from deposits over 1 million rubles will be taxed on the income tax, but this does not indicate the complete futility of this instrument. Another area is the creation of pension deposits in commercial banks. They also take into account the long-term nature of investments and are more attractive to people with a conservative pension strategy and low disposable income.